Apple, Samsung, and the White Queen's Gambit

"Alice laughed: "There's no use trying," she said; "one can't believe impossible things."
"I daresay you haven't had much practice," said the Queen. "When I was younger, I always did it for half an hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."Alice in Wonderland.

Now that the jury has given Apple almost everything it asked for in its infringement suit against Samsung, what should we expect to happen next? I think it's a given that Samsung will appeal. Given the damages awarded and the obvious determination of Apple to defend its patents, Samsung has little choice but to press forward wherever it can in court.

This doesn't necessarily mean that it's ultimate goal is to prevail through litigation, because it will constantly be running into existing and new Apple patents for so long as they remain competitors in the marketplace. Ultimately, what should make the best sense for Samsung is to negotiate the most comprehensive patent cross license with Apple that it can, and maintaining a full court press throughout the world's legal venues is the best way to ensure that it can get the best terms possible in such a license.

A cross license would make great sense for Samsung, since clearly Apple is the innovation leader in the mobile device space. And since Apple likes to price to the top of the market, that means that anyone that has a license to knock off Apple products with sufficient skill can do very well, outselling Apple in number of devices at lower price points (and margins). Normally, each company would be willing to settle with such a cross license rather than exhaust its remedies in court, because each company will usually be in a position where they need the other company's patents as much as it needs theirs, so why not get out of each others way and get on with it?

But of course Apple is different, because Apple (unlike most companies) may not be willing to license its most innovative features. Indeed, if Steve Jobs was still at the helm, I think that there would be little doubt that this would be the case. Presumably, this would be the right decision for Tim cook as well, because it is Apple's innovation and style sense that justifies its premium prices. Plus, it has boatloads of cash in the bank, and the number of devices pouring into the market place would generate more than enough to recover legal costs if Apple is successful only part of the time. Throw the IOS vs. Android aspect into the mix, and it's hard to see how this won't be in the courts for quite a while to come.

Indeed, Samsung has little choice, because almost any price in legal fees would be less than having its existing products barred from the marketplace. The longer it can forestall that result, the better its bottom line, even if ultimately it has to pay up on those damages. Indeed, filing an appeal is like forcing Apple to license its patents if the result is to stay a bar on the sale of Samsung's infringing products. All in all, it's a very cynical but pragmatic game.

Lately, we've all gotten used to analogizing patents to nuclear weapons, and equating patent strategies to those that would have led to mutually assured destruction. But in the case of the current patent wars focusing on mobile devices, trench war may provide a more apt metaphor.

Why? Because most legal processes move so slowly, and at such great expense. It seems as if there's always another motion and another appeal, with neither side often holding any ground gained for very long. By the time all remedies have been exhausted, the technology in question may have been leapfrogged by new innovations - and perhaps new legal actions as well. In the meantime, wave after wave of lawyers and stockholder equity are thrown into the breach, while each company otherwise goes on with business, and sales, as usual.

The key to the defendant, of course, is to do whatever it takes to prevent its products from being barred from the marketplace so that it can remain competitive. The result? The plaintiff isn't getting the benefits of its patents, at least on a current basis, and the defendant is pouring its money into legal defense rather than coming up with its own non-infringing innovations.

If by now you're scratching your head and thinking that the current patent system doesn't make a whole lot of sense, well, that would be no surprise. At least if you're still on this side of the looking glass, anyway. Doubtless you would need to live on the White Queen's side of the interface between reality and nonsense to think this many impossible things before breakfast.

Isn't it time you read:The Alexandria Project?

a Tale of Treachery and Technology

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